Nationwide, the demand and cost for wholesale electricity is rising, and this will impact local electric rates. To keep pace with actual costs, Sioux Center Municipal Utilities is considering an electric rate increase this summer and next summer.
Sioux Center has a community-owned electric utility, and this proposed increase will help cover the rising costs of wholesale electricity, inflation and cost of living, as well as continued investment in the reliability of the local electric system.
About 23% of Sioux Center’s power mix is from federal hydroelectric dams on the Missouri River, and the remaining 77% is purchased through our energy provider Missouri River Energy Services (MRES), a mix of what they generate and what they purchase from the energy market. Rates for wholesale electricity from both sources are increasing, similar to wholesale rates across the market.
Sioux Center is also seeing rising costs to continue maintaining a reliable local distribution system and will be paying for a portion of constructing 11 megawatts of local electric generation, a project that ultimately will have the majority paid for through MRES.
To help cover rising costs, the City Council is considering a 7% rate increase starting the last week in July and a similar increase the following year. The council approved the first reading of this proposal this week and will review it at two more council meetings this summer.
For an average family of four, this year’s proposed increase would represent about $7 on a monthly bill. For the previous decade, 2015-2025, the average residential electric bill only increased by about 9%
“Because we’re community-owned, not investor-owned, when we raise rates, it’s just us asking customers to more accurately cover the cost of the electricity they use. It reflects increasing costs of purchasing and transmitting electricity to Sioux Center and keeping our system well-maintained,” said City Finance Director Darryl Ten Pas. “Updating our rates will help us continue to provide reliable electric service here in Sioux Center.”
The first reading of the proposed rates was approved at this week’s City Council meeting. The ordinance will need to be approved at two additional readings before the change goes into effect.
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